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OPINION

Opinion | Speak up before electric bills go up

Inmate Jeffrey Gunnells gives a demonstration of the tree-trimming training program at the Vocational Village at Parnall Correctional Facility in Jackson, Mich. on Tues., July 9, 2019. Michigan Department of Corrections partnered with DTE Energy to provide training and jobs for inmates after being released.(Photo: Kimberly P. Mitchell, Detroit Free Press)

If you pay close attention to your electric bills, you probably have noticed that they generally keep going up, year after year. But what you can’t tell from your bills is that not everyone’s goes up as fast. The trend for about a decade has been that a typical Michigan resident is paying more and more for electricity, while businesses, from Fortune 500 companies on down, have not seen their electricity rates go up nearly as much.

On July 8 DTE Energy, the largest electric utility in the state with over 2.2 million customers, asked state regulators to approve a $351 million rate increase, which would push up rates for residential customers by 9.1%. Just this past May, DTE got regulatory approval for a rate increase of 4.8% on its residential customers, not including tax rebates. Even before these latest moves, Michigan residents paid the 12th-highest electricity rates in the 50 states.

It seems worth asking, then, what Michiganders are getting in return for this rising electricity cost burden. Unfortunately, even though their customers pay so much, by most measures Michigan utilities are well below average at powering the state’s households.

The Citizens Utility Board of Michigan, a new nonprofit group that advocates for Michigan residential ratepayers, decided to closely examine federal data on the price paid for electricity for different customers around the nation and the quality of utility service. Our study is available at cubofmichigan.org.

The study found that, starting around 2009, the rate for electricity paid by residential households in Michigan of all types of income began increasing at a significantly faster rate than for commercial and industrial customers — not only compared to previous years, but also compared to the rest of the country. Now, Michigan residents’ average monthly rate is higher than the average monthly rate for industrial customers by an amount greater than that found in any other state with the exception of New York. The difference between residential rates and commercial rates is 3rd-highest in the country, surpassed only by Pennsylvania and Vermont.

DTE in particular stands out. DTE residential customers pay 8.78 cents more than industrial customers for each kilowatt-hour of electricity. Across the country, the average difference is 5.62 cents. DTE’s gap between residential and industrial customer rates will increase with the latest rate filing.

The burden of high electric bills on residents means that those with the least ability to pay, such as elderly people on fixed incomes or low-income families, must pay a greater share of their already stretched incomes on electricity, a necessity of modern life.

So Michiganders must be getting some of the best electricity service in the country in return for these high prices … right? Not at all. CUB found that in 2017, the year with the most recent full data available, on average Michigan utility customers had to wait longer for power to be restored after an outage than other customers in all but three other states. DTE was the utility in the state with the longest average restoration time at nearly 13 hours. In terms of the number of outages per customer, and putting aside the length of these outages, DTE actually scores slightly better than the national average. But the fact that even with fewer outages, DTE customers still spend so much time in the dark, suggests that DTE is particularly bad at restoring power once there is an outage.

When most businesses provide sub-par service, their customers take their dollars elsewhere. That’s not an option for the millions of DTE customers in southeast Michigan, who have no choice but to pay their regulated monopoly electricity provider.

So what is to be done to improve the affordability and reliability of energy in Michigan?

Residents from across the state need to demand that regulators not rubber-stamp the utility’s request. Instead, the commission should require the utility to meet performance targets before it can receive more ratepayer cash. DTE customers should not have to pay above-average rates for below-average service.

DTE should also be required to rethink the fairness of charging residential households so much more than commercial and industrial customers. There is no reason why Michigan residents, particularly low and moderate-income households, should have to pay a bigger share of electricity costs than residents of most other states.

The MPSC accepts comments from the public, online or through mail. DTE customers across Southeast Michigan should make their voices heard before their electric bills go up again.

Robert Nelson served as a commissioner on the Michigan Public Service Commission from 1999 to 2005. He is currently the president of the Citizens Utility Board of Michigan.